I could tell you what this means to your house, your 401k, your job security and your quality of life (The answer to all of those: Nothing good.) but you’ve been hearing about all that for days now. No, I’m going to tell you how this affects the things that are really important: Video games.

Right now nobody can be sure what’s going to happen to the economy, so by extension nobody knows what’s going to happen to gaming or any other sector. It all hinges in large part on Wednesday, on people’s reaction to today’s rebound. If they have confidence in the economy things will stay largely the same but on a smaller scale. If they think this is only the tip of the iceberg they’ll take the opportunity to exit the market until things calm down and there will be another record-setting nosedive.

That said, there is a best case and a worst case scenario for what could happen to the industry and to the games themselves.

The Best Case

No matter what happens in the market on Wednesday the plunge Monday is going to limit what game companies can do. It’s still a very profitable industry but they, like everyone else, aren’t going to be very willing to spend money until things settle down, opting instead to keep more funds on-hand to keep the company afloat should the worst happen.

This means we probably won’t see another $100m production budget like we did with GTA4 for a while now, even in the best of circumstances. Companies will instead focus on established properties and build them on existing engines to reduce cost and risk. It’s essentially the model used by Madden; why build a whole new game when you can just change levels and character models and make Force Unleashed 09.

Of course at the same time this could spark a lot of innovation. Independent developers will still be out there and it’s a lot cheaper to buy and publish a game they built already than to make your own. Portal has shown that a small team can have a hit with a low-budget, quirky game, so finances may encourage them to give more low-cost, low-risk indie titles a shot.

The Worst Case

But what if things get bad? Really bad, Great Depression II bad? Bread lines and tent cities in Golden Gate Park bad? Will that spell the death of gaming?

The answer is, in short, no. In fact it could be the final push needed to make gaming mainstream.

When times are tough people look for an escape, a way to forget, if only for a while, the hard realities of their time. During the original Great Depression people went to the movies. What was a novelty became a way to get away from it all for an hour or two, and as a result we went from City Lights in 1931 to Gone With the Wind in 1939. The sophistication and acceptance of the medium, driven by the increase in interest, was staggering.

By all accounts if there is another Great Depression that role will be filled by video games. The climate is right for it. The Wii is in a vast number of homes and not just those with kids. It’s mainstream enough that it’s not known as a niche diversion but at the same time isn’t ubiquitous like movies or TV, meaning it’s new enough to still be exciting to a large segment of the population.

So does that mean Gone With the Wind is coming soon? Not so much. The best-case scenario still applies. Game companies will be hurting as much as everyone else, so there will be a lot of cookie-cutter attempts to capitalize on existing franchises. The bread and butter of the Wii right now, things like minigame compilations, remakes and simple platformers, will become the norm. The games themselves will be at an all-time low in quality.

Of course they’ll be played by an all-time high number of people. As the economy recovers those people will still be gamers, pouring more money and respect into the industry, so after the bad times pass games will be better than they ever were before.

The Final Word

No matter what happens to the economy video games will suffer to the same extent as everyone and everything else. No industry is immune from economic hard times. But in the long run, history tells us that this could be looked upon as the turning point, the start of a golden age.

So just keep that in mind when you’re playing yet another average to bad minigame compilation that you had to save for two weeks to afford. It’s always darkest before the dawn.